PayPal Fees on VAT

[Marantz]

Is there a way that I don't have to pay PayPal fees to collect the UK govs VAT? Or I can reclaim them?

If I sell an item for £20 + £2.00 post my fees would 3.4% + 20p = 86p in PayPal fees

when I sell the item with the VAT on my PayPal fees go up to £1.10p so its costing me 24p to collect the governments VAT

pushing up my PayPals fees on the item I'm selling to 5% in real terms

Any help would be appreciated as I don't like to think that PayPal is making money out of me collecting VAT for the UK Gov

[snowshoe]

As the fees are included in the transaction there's really no work around.  PayPal looks at the total of transaction and charges fees accordingly.

Note, this is just not a PayPal thing.  Every credit card processor does the same thing, they process the total amount on the the transaction, you pay the fee on the total amount.  We have 3 merchant accounts, 1 with PayPal and 2 others, they all work the same.

[WileECoyote]

Hi. Why not simply log the PayPal fee as a debit in your business accounts and take off 20%, or whatever the current rate is, as VAT. That way, the VAT is removed before you make your VAT return. Plus the net fee is offset against your tax obligations as a business expense.